SEIPI steps up game

February 14, 2018

After hitting record in electronics exports in 2017, the Philippines is stepping up its game as a supplier of electronics and semiconductor products.

The Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) projects that by 2030, exports would increase more than 50 percent to $50 billion from $32 billion last year while investments shall grow five times to $5 billion from $1 billion in 2017.

Dan Lachica, SEIPI president, said the industry will launch a roadmap dubbed as the Product and Technology Holistic Strategy (PATHS) which has identified the top products and technologies that the industry should be focusing on in the next five years in order to develop a niche in the global market, as well as the right conditions necessary to make this goal happen.

These products and services are based on emerging technologies such as internet of things (IOT), artificial intelligence (AI) , virtual reality, automated cars, self-driving cars and big data.

In finding the Philippine competitive edge, Lachica said has identified specific products in semiconductors such as sensors which are needed for
for IOT, self driving cars and even disaster preparedness.

PATHS also tagged IC (integrated circuits) as an opportunity particularly as there are about four companies doing these in the Philippines.

In electronic equipment manufactures, Lachica said the Philippines can tap 3D printing as well as wearables and smart phone manufacturing.

In automotive, Lachica said the Philippines can build sub-assemblies for automotive electronics like ignition controls, engine controls and sensors.

Lachica also sees the need to expand the country’s electronics manufacturing services (EMS) to areas like research and development.

SEIPI, he said, is working with possible partners to invest in the following: IC design center, lab-scale wafer fabrication and R&D lab.

“We cannot have a wafer fab unless we address the power issue so we make do with lab scale one,” said Lachica.

To lower the cost of investment, Lachica said SEIPI will use cloud-based IC design center since a commercial IC design center costs about $1 billion; will tap used equipment for the wafer fab and build a smaller scale R&D center.

Following record numbers and a strong 11 percent growth in 2017, SEIPI is setting a slower growth projection of 6 percent this year, tracking global projections of 6 to 8 percent. It also cited geopolitical reasons, new technologies and slow investments as reason for the conservative growth goal.

Pending confirmation by the Philippine Economic Zone Authority, Lachica said the Philippines registered less than $1 billion in investments last year.

“We are not hitting big numbers (compared with) Vietnam and Singapore which have much bigger numbers,” Lachica said.

“We are trying to address how to attract more investments… we have weathered the storm, we are nimble… there are challenges but we want to preserve the strength of the electronics industry,” he added.

Lachica said in exports, the country is already coming from a high base.

With imports of electronics reaching about $23 billion in 2017, net exports last year was only around $10 billion.

But according to Lachica, the value-added of the industry has increased to 29 percent from 20 to 24 percent in previous years.

“There is much to be done. We want to develop the supply chain and improve the capacity of suppliers through mentoring, technology transfer,” he said.

Lachica said localization is an opportunity for the industry to reduce dependence on imported materials and dollars and to increase demand of products of small and medium enterprises.

The industry currently has 3.2 million workers. This will reach 5.5 million
by 2020, 9 million in 2025 and 13.5 million in 2030.

With PATHS, SEIPI sees s more robust investments projected at an additional $1.5 billion in 2020, $3 billion in 2025 and $5 billion in 2030.

Export values are expected to reach $40 billion in 2025 and $50 billion in 2030.

Column of the Day

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